As 7 May draws ever nearer, the political polls remain indecipherable at best – and may be misleading where they pretend otherwise. The odds and spreads however, have started to tell an interestingly different and important development. I will try to translate.
To start with the odds:
Tory minority: 14/5
Labour minority: 6/4
This indicates a ‘preference’ for a Labour coalition – but Miliband has ruled one out with the SNP.
Tory majority: 7/4
Labour majority 40/1
This highlights the inevitability that Labour will win fewer seats than the Tories and will need the SNP.
Cameron to be the next PM: 8/11
Miliband to be next PM: 8/11
ie one or other is sure to be PM. What a surprise.
These odds are uninvestable, and tell us nothing, except that Miliband is considered ‘most likely’ to be able to form the next government: but how, other than with the SNP, with whom he has ruled out coalition?
For Miliband to reach a ‘confidence and supply’ deal with the SNP will not overcome Cameron’s incumbent advantage. And to try to cobble together a deal including Plaid Cymru (4), the Greens (maximum 1) and other left-wing fringe parties (4) – while it would get him over the 323 threshold – could not be a coalition of any sort.
Now look at this morning’s spreads – IG Index tells me that it has seen good business this morning, with the Tories sharply better:
Tory 285.5 – 289.5 (up)
Labour 266.5 – 270.5 (down – a big move to the SNP)
LibDem 22 – 24 (down slightly)
SNP 46.5 – 48.5 (up – swing from Labour)
Ukip 3.2 – 5.2 (no change)
Jim Murphy and Douglas Alexander both look set to lose their seats, decapitating Labour in Scotland.
Now the maths from the spreads (using the offer prices):
Tory (289) + LibDem (24) = 313 + DUP (9) + Ukip (5) = 327.
Cameron has every right to try his luck. The rise in Tory seats could be the start of a ‘surge’ to the Tories. It is the first move In the Tory spread for over a month.
Labour (270) + SNP (48) = 318 + 9 (fringe left parties) = 327.
However, Miliband will have to try negotiating with that lot while Cameron is driving to the Palace. Cameron could justify his right to inform the Queen’s Speech, cobble together a Budget and not be voted out of office because of the five-year Parliament Act.
Then the fun starts: Boris might supplant Cameron before that speech, as the price of Ukip support – and that of Clegg’s successor (Cable?). The first bill for the Tory leader to introduce would likely be the boundary changes: so obviously fair that no one would dare gerrymander. That would be worth 20 or more extra Tory seats = game over.
So on present showing, it will be very close. But things that could help Cameron to win are ‘incumbent party advantage’ (1-2%), Ukip eating into the Labour vote in northern England, and Labour votes there reacting to SNP blackmail. And Clegg, if re-elected, will choose the largest party.
With less than three weeks to go, it is the next move in the spreads that will matter. They could easily reverse themselves, but I will tell you.